Obama delays oil pipeline, Neb. claims victory

Demonstrators march with a replica of a pipeline during a protest to demand a stop to the Keystone XL tar sands oil pipeline outside the White House on Sunday, Nov. 6, 2011, in Washington. (AP Photo/Evan Vucci)
— AP

Demonstrators march with a replica of a pipeline during a protest to demand a stop to the Keystone XL tar sands oil pipeline outside the White House on Sunday, Nov. 6, 2011, in Washington. (AP Photo/Evan Vucci)
/ AP

Gerhard Grieb, of Sandy Spring, Md., holds an American flag with corporate logos during a protest against the Keystone XL Pipeline outside the White House on Sunday, Nov. 6, 2011, in Washington. (AP Photo/Evan Vucci)— AP

Gerhard Grieb, of Sandy Spring, Md., holds an American flag with corporate logos during a protest against the Keystone XL Pipeline outside the White House on Sunday, Nov. 6, 2011, in Washington. (AP Photo/Evan Vucci)
/ AP

Demonstrators march with a replica of a pipeline during a protest to demand a stop to the Keystone XL tar sands oil pipeline outside the White House on Sunday, Nov. 6, 2011, in Washington. (AP Photo/Evan Vucci)— AP

Demonstrators march with a replica of a pipeline during a protest to demand a stop to the Keystone XL tar sands oil pipeline outside the White House on Sunday, Nov. 6, 2011, in Washington. (AP Photo/Evan Vucci)
/ AP

LINCOLN, Neb. 
Nebraska rancher Bruce Boettcher was ecstatic when he learned the rumors swirling out of Washington were true: plans to build a 1,700-mile oil pipeline from Canada to Texas were on hold to study how environmentally sensitive areas in his state could be avoided.

He'd fought the project with neighbors whose land also sits atop the Ogallala aquifer, a massive underground water supply in the pipeline's path - and at the epicenter of the national debate. Nebraska officials including its Republican governor pushed against the project, as had environmentalists and national groups.

Until Thursday, when the U.S. State Department announced a delay in its federal permitting decision for the TransCanada Corp. pipeline, Boettcher wasn't sure if the protests and public hearings had made a difference.

"I didn't think we'd get this far this quick, to tell you the truth," the 55-year-old, fourth-generation rancher said. "TransCanada is persistent. But when they get persistent, I get persistent."

The Obama administration said other potential routes for the Keystone XL through Nebraska needed to be studied, creating a delay that likely puts off a final decision until after the 2012 election - a move that didn't go unnoticed by supporters and opponents of the project.

The $7 billion pipeline would carry oil from the tar sands in Alberta, Canada, to refineries on the Texas Gulf Coast. TransCanada is seeking to build the 36-inch pipeline through Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas.

Russ Girling, TransCanada's president and CEO, called the pipeline "shovel-ready," adding that it could create as many 20,000 jobs.

But Thursday's announcement means the Calgary-based company will have to figure out how to move the pipeline around the Nebraska Sandhills region and the aquifer, which flows under eight states and provides water crucial to huge swaths of U.S. cropland.

An environmental review of the new section is expected to be completed in early 2013. The State Department has authority over the project because it crosses a U.S. border.

President Barack Obama said the pipeline could affect the health and safety of the American people as well as the environment.

"We should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood," Obama said in a statement.

The heavily contested project has become a political trap for Obama, who risks angering environmental supporters - and losing re-election contributions from some liberal donors - if he approves it, and criticism from labor and business groups for thwarting job creation if he rejects it.

The Keystone XL pipeline would carry as much as 700,000 barrels of oil a day, doubling the capacity of an existing pipeline operated by TransCanada in the upper Midwest. Supporters say the pipeline could significantly reduce U.S. dependence on Middle Eastern oil while providing thousands of jobs.

Among its supporters are Oklahoma's governor, congressional delegation and even the oil and gas industry. They say the Keystone XL would provide additional takeaway pipeline from large oil storage facilities in Cushing, a city in northwest Oklahoma dubbed the "Pipeline Crossroads of the World."